Ukraine’s banking system is now sufficiently resilient and capitalized and has a significant stock of liquidity to rely on, with more than UAH 210 billion in the banks’ correspondent accounts and certificates of deposit. The banks continue to operate without interruption and to provide services to clients.
At the same time, the central bank prioritizes supporting the financial system to prevent and mitigate the potential negative impact of the restrictions imposed to contain the spread of COVID-19. In view of the above, the NBU has been taking the following steps:
- The centrals bank is maintaining its presence in Ukraine’s FX market in accordance with the Foreign Exchange Intervention Strategy of the National Bank of Ukraine for 2016–2020.
- The NBU is using standard refinancing instruments to support the banks’ liquidity.
- The NBU will delay the introduction of capital buffers, including the capital conservation buffer and the systemic importance buffer. However, banks must meet the minimum capital adequacy ratios for core and regulatory capital.
- The central bank has pushed back its onsite inspections of the banks and other financial institutions until after the COVID-19 restrictions have been lifted.
- The central bank is monitoring trends in the financial sector, in particular the liquidity and quality of the banks’ credit portfolio.
- The NBU has rescheduled the stress testing of the banks for a later date.
In addition to these measures, the NBU may:
- reduce reserve requirement ratios for FX deposits
- temporarily reduce the minimum LCR
- announce unscheduled liquidity assistance tenders
- expand the list of collateral acceptability criteria for emergency liquidity assistance loans.
The NBU also recommends that the banks delay the distribution of profit through dividend payouts till at least July 2020 to have an additional margin of safety.